Question

a.In the context of demand planning what advantages and disadvantages do you think an online retailer has relative to a traditional fixed store retailer

b.The Moving Average method is widely used in fast moving supply chains. Why do you think this the case and what are some example cases in which it would be an effective forecasting solution.

Answer 1

1.a.Demand planning can be better adopted by an online retailer because it has a modern and sophisticated way of forecasting of the demand as it does not have much of the operational cost, and it can easily forecast it's demand through the operational website and it can also generate a product popularity index by network and product traffic, which is available on its website so these facilities which are offered by the online retailer because of the convenience of the buying and cost cutting as well as time saving will help it in gaining a better idea of its demand.

This company will also have disadvantages because this company lack the personal interaction and they are not able to get the mood of the consumer, because they are just focusing at the online interaction so all those physical retailers who are continuously interacting with the customers are able to get the mood of the market and then they can price their product accordingly.

1.b. moving average method is used to to get a fair idea about the past demand trends of a product and it is widely used by the fast moving supply chain because their demands are highly fluctuating in nature and they need to get a fair idea of the demand in a period of time so they can use this method in order to analyse better idea of the demand because this will help in analysing about the past few periods of demand and it helps in forecasting the future demand as well.